Fairfax sees losses from catastrophes fall 43% despite higher claims from wildfires
TORONTO Fairfax Financial Holdings Ltd. says it sustained US$232.7 million in insurance losses resulting from Californian wildfires that struck the state last year.
That compared with US$185.4 million of losses in 2017 from wildfires in the state. Overall catastrophe losses decreased 43 per cent to US$752.3 million in 2018 from US$1.3 billion in 2017.
In addition to wildfires, the Toronto-based company recorded losses from hurricanes Michael and Florence, typhoon Jebi and other events. That compared with heavy losses a year ago from hurricanes Irma, Maria, Harvey, Mexican earthquakes and other events.
Despite the catastrophe activity in 2018, Fairfax insurance companies had an excellent underwriting performance, said chairman and CEO Prem Watsa. Overall, the company, which reports in U.S. dollars, says it earned $376 million, down from $1.74 billion in 2017 when it recorded a more than $1-billion gain primarily from the sale of First Capital. Revenues increased to $17.7 billion from $16.2 billion.
During the fourth quarter, ended Dec. 31, it lost $477.6 million or $17.89 per diluted share. That compared with a net profit of $869.5 million or $30.06 per share in the prior year. Net revenue decreased to $4.18 billion from $5.3 billion in the fourth quarter of 2017.
Fairfax was expected to lose $10.69 per share on $3.98 billion of revenues, according to analysts polled by Thomson Reuters Eikon.